Ministry of Finance
Project Signing: New World Bank Project to Improve Groundwater Management in Select States of India
The Government of India and the World Bank today signed a $450 million loan agreement to support the national programme to arrest the country’s depleting groundwater levels and strengthen groundwater institutions.
The World Bank-supported Atal Bhujal Yojana  – National Groundwater Management Improvement Programme will be implemented in the states of Gujarat, Maharashtra, Haryana, Karnataka, Rajasthan, Madhya Pradesh, and Uttar Pradesh and cover 78 districts. These states span both the hard rock aquifers of peninsular India and the alluvial aquifers of the Indo-Gangetic plains. They were selected based on several criteria, including degree of groundwater exploitation and degradation, established legal and regulatory instruments, institutional readiness, and experience in implementing initiatives related to groundwater management.
The programme will, among others, enhance the recharge of aquifers and introduce water conservation practices; promote activities related to water harvesting, water management, and crop alignment; create an institutional structure for sustainable groundwater management; and equip communities and stakeholders to sustainably manage groundwater.
Shri Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance said that in India groundwater is an important source for rural and urban domestic water supplies and its depletion is a cause of concern. The Atal Bhujal Yojana intends to strengthen the institutional framework for participatory groundwater management and encourage behavioral changes at the community level for sustainable groundwater resource management. The use of cutting-edge technology, involving Artificial Intelligence and space technology will further help in better implementation of the programme.
The loan agreement was signed by Shri Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, on behalf of the Government of India and Mr Junaid Ahmad, Country Director, India on behalf of the World Bank.
Mr Junaid Ahmad said that groundwater is India’s most crucial water reserve and managing this national resource is the need of the hour. This programme will contribute to rural livelihoods and in the context of climatic shifts, build resilience of the rural economy. But its impact will also be felt globally as it stands as one of the important programmes of groundwater management worldwide.
The last few decades saw an exponential growth in the exploitation of groundwater through the construction of millions of private wells. Between 1950 and 2010, the number of drilled tube wells increased from 1 million to nearly 30 million. This allowed the area irrigated by groundwater to increase from approximately 3 million ha to more than 35 million ha. Groundwater currently provides approximately 60 percent of irrigation water. Over 80 percent of the rural and urban domestic water supplies in India are served by groundwater making India the world’s largest user of groundwater.
If the current trends persist, 60 percent of districts are likely to reach critical level of groundwater depletion within two decades, which in turn will render at least 25 percent of the agriculture production at risk. Climate change will likely exacerbate current pressures on groundwater resources.
The programme will introduce a bottom-up planning process for community-driven development of water budgets and Water Security Plans . Water budgets will assess surface and groundwater conditions  and identify current and future needs. The WSP, on the other hand, will focus on improving groundwater quantity and incentivize selected states to implement the actions proposed. Such community-led management measures will make users aware of consumption patterns and pave the way for economic measures that reduce groundwater consumption.
“The Programme will support on-ground actions that are based on community ownership and judicious management of water resources. Reversing groundwater overexploitation and degradation is in the hands of the hundreds of millions of individuals and communities – they need the right incentives, information, support, and resources to move to a more sustainable development and management of groundwater resources,” said Abedalrazq Khalil and Satya Priya, Senior Water Resources Management Specialists and World Bank’s Task Team Leaders for the programme.
Crop management and diversification will be the other focus areas. Studies indicate that a one percent increase in the area irrigated with groundwater leads to a 2.2 percent increase in greenhouse gas  emissions. Also, a one percent increase in irrigation efficiency will reduce GHG emissions by 20 percent. The programme will support adoption of micro-irrigation systems, including sprinkler and drip irrigation to increase productivity and support farmers to shift to low water-intensive crops.
To facilitate this process, the government will transfer a significant portion of the money  to local governments, including districts and gram panchayats, as incentives for achieving targets in groundwater management. The remaining funds will be used for providing technical support for sustainable management of groundwater and strengthening institutional arrangements in the selected states.
The $450 million loan, from the International Bank for Reconstruction and Development , has a 6-year grace period, and a maturity of 18 years.